Grocery spend powers digital payments boom

by AKANI CHAUKE

JOHANNESBURG – SOUTH Africa’s year-end trading data points to resilient consumer demand and a strong outlook for digital payments, with grocery and food retail emerging as key growth drivers during the 2025 festive season.

Transaction data from Standard Bank shows that rising consumer spend and accelerating digital adoption are reshaping how businesses and customers transact, reinforcing digital payments as core commercial infrastructure rather than a discretionary add-on.

Digital transaction volumes increased by 10.5% year on year to 74.15 million, while transaction values rose 10% to R35.62 billion.

The gains reflect sustained momentum across both consumer and business segments, particularly during December, traditionally the country’s busiest trading period.

E-commerce was the standout performer, with transaction volumes surging 40% year on year.

The sharp increase signals a lasting shift in consumer behaviour toward mobile-first and online shopping, as shoppers increasingly favour convenience, speed, and integrated digital experiences over traditional retail formats.

For merchants, the trend presents significant scale opportunities, but also heightens the need for secure, unified platforms capable of handling high transaction volumes across web, mobile, and social channels.

Grocery stores led sectoral growth in December 2025, with turnover rising 23% year on year, followed by food and convenience stores at 12%. Regionally, the Western Cape recorded the strongest growth at 23%, while KwaZulu-Natal grew 10.5% and Gauteng 7%, highlighting broad-based consumer activity across major economic hubs.

According to Norman Nyawo, head of merchant solutions for business and commercial banking at Standard Bank South Africa, December’s performance reflects the maturity of the country’s digital payments ecosystem.

He notes that consumers are increasingly prioritising convenience, while retailers are investing in integrated digital platforms to meet demand. “This growth is not just about volumes and values; it speaks to trust, innovation, and the future trajectory of e-commerce,” he says.

The data also underscores emerging structural shifts in payments. Digital acceptance across in-store, online, and social platforms is becoming essential for customer retention, while real-time payment rails such as PayShap for Business are reducing reliance on next-day settlement.

Immediate access to funds is proving particularly valuable for small and medium-sized enterprises managing cash flow and inventory.

In parallel, embedded finance models are gaining traction, with transaction histories increasingly used to unlock pre-approved lending and enable buy-now-pay-later options without merchants assuming credit risk.

Social commerce is also expanding, as in-chat checkout and secure payment links allow businesses to complete sales directly within messaging and social media platforms.

Looking ahead to 2026, Standard Bank expects these trends to deepen as digital payments evolve into the foundation of sustainable business growth.

The surge in festive-season spending, the bank says, is less a seasonal spike than a signal of a more connected, inclusive, and digitally driven South African economy.

– CAJ News